Hydro rates increase across Ontario on Tuesday

The Canadian Press
Published Tuesday, May 1, 2012 10:55AM EDT

Get ready for a heftier hydro bill.

Ontario residents will start paying more for electricity starting Tuesday.

A typical household using 800 kilowatt hours a month will see the "electricity" line on their hydro bill increase by nearly six dollars, while consumers using smart meters -- or time-of-use pricing -- will see an increase of about four dollars.

The Ontario Energy Board, which reviews the rates twice a year, said prices are changing as coal-fired generation declines and is replaced with natural gas, nuclear and renewable energy.

But critics say the governing Liberals' expensive foray into wind and solar power is the main culprit behind higher hydro rates.

Ontario pays up to 80.2 cents a kilowatt hour for small rooftop solar power and 13.5 cents per kWh for wind power.

Ontario Power Generation, the government-owned utility, is paid 5.6 cents a kWh for nuclear power and between two cents and 3.5 cents per kWh for power from its hydro-electric facilities. Residential consumers pay between 6.2 cents and 10.8 cents a kWh.

High electricity rates will drive away businesses that Ontario needs to grow its economy, said Progressive Conservative Leader Tim Hudak.

"It's hitting families hard in the pocketbook and it's chasing jobs out of the province," he said.

"We're on the wrong path. We just can't afford to keep paying 10 times the price of power for wind and solar."

Energy Minister Chris Bentley said the rate increase mainly reflects the cost of upgrading Ontario's electricity system, not what the province pays for green power.

"The reality is that very little of the price increase we see is as a result of the renewable energy approach," he said. "That will come on more in the future."

The province announced in March that it would lower the guaranteed rate for wind and solar power, but the reduced rates only apply to new contracts.

Thousands of contracts were approved during the first two years of the feed-in-tariff program at the higher rates that will last for 20 years.

Electricity rates will continue to rise, but there are many factors at work, including inflation and investments in conservation, transmission and distribution, said Elise Herzig, president and CEO of the Ontario Energy Association.

Green energy is only a small portion of the May rate increase, she said. Last year, only three per cent of Ontario's power came from wind and solar.

"But they will be the bulk of the cost increases over the next five years," Herzig added.

In 2010, the government warned that hydro bills would jump 46 per cent over five years and green energy would be responsible for 56 per cent of that increase.

Nuclear power is another reason why hydro rates are going up, according to the New Democrats.

Consumers who are still paying for Ontario's last nuclear build will see prices go up again when the government moves ahead with its $26-billion plan to refurbish its aging nuclear fleet, said NDP Leader Andrea Horwath.

"If people think that we're refurbishing Darlington for free, then they have another thing coming," she said.

"It's costing billions of dollars for new nuclear builds on the horizon and, of course, we know that these projects never come in on time and they never come in on budget."

Photos

Ontario electicity rates going up average of $6 for the summer.

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